Navistar shares jump on sale speculation

CHICAGO (March 25) — Navistar International chairman and CEO John Horne has been saying his company’s shares are undervalued. They received a boost yesterday, jumping 17% amid speculation that merger talks with Volvo AB are heating up again.

Navistar rose 6 1/16 to 42 3/16 on volume of 1 million shares, with almost all of the gain in the last half-hour of trading yesterday. Six of the trades were in the last 40 minutes were blocks of 10,000 to 15,200 shares.

However, Volvo Trucks North America president Marc Gustafson told a group of journalists at the Mid-America Truck Show in Louisville, Ky., today that no news of any deal would be announced during the course of the industry event, which runs through this weekend.

Chicago-based Navistar, the world’s fourth-largest producer of commercial trucks, has been seen as potential target for Volvo, which has been actively looking to acquire a truck producer since it agreed in January to sell its car operations to Ford Motor Co. for $6.45 billion US.

Volvo CEO Leif Johansson said his company is talking with a variety of companies about partnerships, alliances, or acquisitions to compete more effectively with DaimlerChrysler AG, the global leader in commercial trucks. DaimlerChrysler produces Freightliner and Sterling trucks in North America.

Last month, Volvo dropped its attempt to buy the rest of Swedish truckmaker Scania AB, which it owns a 14% stake in, adding to speculation it might buy Navistar.

Navistar shares reached a 52-week high of 44 15/16 on March 5.